Food industry analysts always warn that shoppers are moving away from center store products, opting instead for fresh, perimeter items. The belief is that consumers, especially younger ones, want to stay away from processed foods as much as they can, and that's hurting the consumer packaged goods market. While that may be partially true, the center of the store is not as avoided as we might be led to believe.
Research from Nielsen shows even though sales in the perimeter of the store are growing, so are center store sales. For the 52 weeks ending in August 2015, center store products accounted for $709.4 billion in sales in the U.S., up $56.7 billion from 2011. The categories that saw the largest gains were all generally center store items, including salty snacks, new age beverages, candy and coffee.
Salty snacks actually saw the largest growth among all categories, with 58% of parents reporting they were asked to buy a salty snack by their families, according to a Harris Poll survey. Other growing categories were largely driven by children's influence, as more kids ask their parents for specific food items than in the past. However, it should be noted that 59% of parents recall instances that they have had to deny their child's request, showing that appealing to parents is just as important as marketing to kids.
It is not surprising that salty snacks are a big seller, as the savory snacks market is forecasted to grow at a combined annual growth rate of 4.34%, reaching $125 billion between 2014-2019, according to SandlerResearch.org. It attributes the increase largely to the replacement of meals with snacks, especially at breakfast. Many more snacks are being included in the category as well, including potato chips, extruded snacks, nuts and seeds, popcorn, pretzels, and meat snacks.
Potato chip sales specifically are forecasted to grow to around $36 billion by the end of 2019, driven by the increased per capita consumption in North America and Europe. Asia-Pacific is also becoming a major market for snack manufacturers, especially Japan, China and India.
E-commerce food sales have been growing at a rate of about 22% per year, and it is expected to make up close to 10% of the overall food and consumables market by 2023, according to data presented by Inmar at the Food Institute's annual Future of Food Retailing webinar, sponsored by BMO Harris Bank. Inmar's Jim Hertel and Craig Rosenblum took a deep dive into the growth and contraction of retail in 2018 and projections on the future of food retailing amidst Amazon's expanding online and brick-and-mortar stake in...read more
Jennette has been with The Food Institute since 2013. As Marketing Director, she is responsible for promoting all Food Institute books, seminars and webinars, as well as writing and editing the Food Institute’s annual publications. Additionally, she writes for and edits the daily news update, Today in Food, and contributes to the weekly Food Institute Report. She has a background in non-profit and environmental marketing, programming and writing, and graduated from Rowan University in 2012 with a degree in Communication Studies.
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